No-Cost Mortgages Are Coming

[tag]Bank of America[/tag], which began to waive lender fees on most mortgages a year ago, thinks it has enough economies of scale and clout with service providers to offer [tag]no-cost loan[/tag]s, an executive with bank said. But even if the bank has to take a loss to originate such a mortgage, he explained, it will be worth it to get customers in the door so it can start building banking relationships with them.

The bank introduced its [tag]Mortgage Rewards[/tag] program, which re-engineered the lending process and promised to knock about $2,000 off the cost to close a $200,000 loan. The savings is higher or lower, depending on the amount of the mortgage, the location of the property and other borrower choices. With Mortgage Rewards, Bank of America waives the [tag]mortgage origination fee[/tag], [tag]loan application[/tag], [tag]lender closing[/tag], [tag]property appraisal[/tag], [tag]flood determination[/tag], [tag]tax service[/tag], [tag]credit report[/tag] and [tag]courier fees[/tag]. Borrowers also receive a $200 credit on their closing statements, and a one-year insurance policy that “cancels” up to six principal and interest payments if the borrower loses his or her job involuntarily and wipes out the balance altogether if the event of accidental death.